QUALCOMM Incorporated Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Sep. 25, 2022

Components of Income Tax Expense (Benefit)

The components of the income tax provision from continuing operations were as follows (in millions):


	2022		2021		2020
Current provision:
Federal	$	1,114	$	942	$	210
State	1		8		1
Foreign (1)	906		518		526
	2,021		1,468		737
Deferred (benefit) provision:
Federal	(34)		(251)		(192)
State	15		2		2
Foreign (1)	10		12		(26)
	(9)		(237)		(216)
	$	2,012	$	1,231	$	521

Income before Income Tax, Domestic and Foreign

The components of income from continuing operations before income taxes by U.S. and foreign jurisdictions were as follows (in millions):


	2022		2021		2020
United States	$	12,537	$	8,781	$	5,004
Foreign	2,461		1,493		715
	$	14,998	$	10,274	$	5,719

Effective Income Tax Rate Reconciliation

The following is a reconciliation of the expected statutory federal income tax provision to our actual income tax provision from continuing operations (in millions, except percentages). Substantially all of our income from continuing operations is in the U.S., of which a significant portion qualifies for preferential treatment as FDII at a 13% effective tax rate.


	2022			2021			2020
Expected income tax provision at federal statutory tax rate	$	3,150		$	2,158		$	1,201
Benefit from FDII deduction	(753)			(550)			(381)
Excess tax benefit associated with share-based awards	(257)			(265)			(83)



Foreign currency losses (gains) related to Korean withholding tax receivable	243			12			(37)

Nontaxable reversal of 2018 EC fine	(224)			—			—
Benefit related to research and development tax credits	(224)			(195)			(125)
Other	77			71			(54)
	$	2,012		$	1,231		$	521
Effective tax rate	13		%	12		%	9		%

Deferred Tax Assets and Liabilities

We had deferred tax assets and deferred tax liabilities as follows (in millions):


	September 25, 2022		September 26, 2021
Unused tax credits	$	1,624	$	1,504
Unused net operating losses	887		663
Customer incentives	807		762
Accrued liabilities and reserves	264		483
Share-based compensation	225		175
Operating lease liabilities	202		188
Unrealized losses on other investments and marketable securities	197		106
Unearned revenues	100		181
Other	335		165
Total gross deferred tax assets	4,641		4,227
Valuation allowance	(2,223)		(1,926)
Total net deferred tax assets	2,418		2,301
Intangible assets	(315)		(198)
Operating lease assets	(184)		(174)
Property, plant and equipment	(101)		(111)
Unrealized gains on other investments and marketable securities	(84)		(215)
Accrued withholding taxes	(62)		(42)
Other	(36)		(34)
Total deferred tax liabilities	(782)		(774)
Net deferred tax assets	$	1,636	$	1,527
Reported as:

Non-current deferred tax assets	$	1,803	$	1,591

Non-current deferred tax liabilities (1)	(167)		(64)
	$	1,636	$	1,527

(1) Non-current deferred tax liabilities were included in other liabilities in the consolidated balance sheets.

Unrecognized Tax Benefits Roll Forward

A summary of the changes in the amount of unrecognized tax benefits for fiscal 2022, 2021 and 2020 follows (in millions):


	2022		2021		2020
Beginning balance of unrecognized tax benefits	$	2,136	$	1,901	$	1,705
Additions based on prior year tax positions	58		56		20
Reductions for prior year tax positions and lapse in statute of limitations	(136)		(13)		(2)
Additions for current year tax positions	184		213		192
Settlements with taxing authorities	(51)		(21)		(14)
Ending balance of unrecognized tax benefits	$	2,191	$	2,136	$	1,901